Several
international expert panels have identified the availability and allocation of
natural resources as a key security risk for the 21st
century. For
many people living in poor but resource-rich countries, the natural resource
wealth is not a risk but has long become a fact with disastrous consequences.
This is
especially the case in the world’s poorest resource-rich region: the Gulf of Guinea
along the West and Central African Atlantic coast.
From
this region, the oil rigs have indeed fuelled the world and keep on doing so,
with its global relevance steadily increasing.
On the
other hand, these exports have more than just ‘failed’ the very same group of
countries. Many of those exporting oil have some of the worst development
indicators in the world. In areas like Nigeria’s Niger Delta for example,
decades of oil production have
virtually destroyed the environment, many people’s livelihoods and their hopes
for a better future. Will natural resources, particularly oil and gas, from the
Gulf of Guinea continue to fuel the world but fail this region in the 21st
century?
Which
possible solutions exist at the domestic, regional and international level to
make oil and gas work for economic development, social justice and democratic governance?
The
“resource curse” (Gelb 1988; Auty 1993) or “paradox of plenty” (Karl 1997)
thesis basically says that countries rich in natural resources are less well
off in terms of economic growth and development more generally than countries
without such an abundance of natural resources. Both
terms have since become catch-all phrases for the bundle of negative
developments in resource-rich countries such as persisting poverty, lack of
economic diversification, rising inequality, growing corruption and violent
conflict. Although resource wealth is often simply assumed to have caused these
outcomes, empirical evidence supports the links between resource wealth and
relatively slower economic growth (Sachs and Warner 2001), civil war (Collier
and Hoeffler 2004) and authoritarian rule (Ross 2001; Jensen and Wantchekon
2004)
Three
particular mechanisms through which the resource curse is supposedly working
are often distinguished: the ‘Dutch Disease’ mechanism, the expansive spending
mechanism and finally the rentier state’ mechanism. The Dutch Disease mechanism
refers to the massive inflow of resource-based state income driving the real
exchange rate and wage levels up. Productive and trading sectors, especially
manufacturing and agriculture thus become less competitive on the world market.
Through
this mechanism the resource-rich country’s economic structure is fundamentally
transformed from a manufacture- or agriculture-led – if it was one before – to
a resource extraction-led economy. This leaves the country less productive,
more exposed to sudden commodity price changes and with a significantly lower
number of jobs than before.
The
second mechanism refers to expansive spending often accompanied by excessive
borrowing against expected future oil income. With oil rents suddenly flooding
in like manna from heaven, the elites of the newly resource-rich states often
go on a spending spree. Whether the money is invested in infrastructure or
public services or wasted on luxurious prestige projects, money is being spent
on a large scale where this has not been the case before. This sudden increase
in spending may increase inflation and have an impact on the exchange rate. It
may also lead to a massive accumulation of debts as soon as the terms for the
repayment of the loans turn less favourable.
These
are the two classic economic mechanisms through which the resource curse works.
They have been studied extensively and approaches have been developed to deal
with them effectively. The third mechanism, here called ‘rentier state’
mechanism, is of a different nature. It is not economic but political and
refers to the effects of the income from natural resources on politics and
political institutions. ...... Michael
Roll Friedrich-Ebert-Stiftung (FES) Africa
Department, Berlin.
Now Ghana has discovered oil and
has now joined the league of the Gulf of Guinea. However, consider that Ghana,
which had US$ 500 more in per capita income than Vietnam in 1985, is poorer
than Vietnam by about the same amount in 2005.
The question l want to ask is,
would Ghana follow this trend in her oil
production?
Would
the Ghanaian oil fuel the world and fail the region where this oil is from?
Let’s
make that giant difference because we have absolutely no excuse as a country
and as a people due to all the experiences that all the other Gulf of Guinea
neighbours have of which we must learn.
 months or less to elections before they commence fixing our street lights, roads, gutters...){kind=link}
